Hearing device manufacturer, Cochlear (ASX:COH), is poised for a strong performance in the fiscal year 2023-24, following a commendable performance until June.
The company predicts underlying net earnings within the range of $355 to $375 million for this fiscal year. Should this projection materialise, it would signify a 16% to 23% enhancement compared to the $305 million recorded in 2022-23 (which experienced a 14% rise in constant currency terms).
Directors at Cochlear indicated that the improved outcome for this fiscal year would be "driven by a combination of revenue growth and improved net profit margin."
"Trading conditions for Cochlear implants remain robust across most markets, with a positive trend observed in adult referral rates in many developed countries," stated the directors.
"At this juncture, we anticipate solid market growth rates to contribute to high single-digit expansion in our cochlear implant units for FY24. We anticipate market share gains achieved in FY23 to stabilise, and a reduction in COVID-related backlog surgeries."
Consequently, sales revenue is expected to surpass the $2 billion milestone, buoyed by a 16% (in constant currency terms) increase in revenue during the June 30th period, reaching a record $1.956 billion.
This performance, coupled with the substantial rise in earnings, facilitated a 21% upswing in the final dividend to $1.75 per share. The total dividend payout for the year amounted to $3.30, a 10% rise from the $3 per share disbursed the previous year.
Directors highlighted that the year until June witnessed "vigorous growth across all business units." Cochlear implant units witnessed a 16% escalation, driven by market growth, enhanced clinical capacity, market share expansion, and the clearance of COVID-related surgical backlogs.
Cochlear reported a 16% surge in sales of its most pivotal product, the implant units, totaling 44,156 units. This growth spanned both developed and emerging markets, leading to a 21% (17% in constant currency terms) rise in sales revenue, reaching $1,131.4 million.
"The successful launch of the CochlearTM Nucleus® 8 Sound Processor in the latter half of the second quarter spurred significant demand for cochlear implant systems and sound processor upgrades. Encouraging trends in adult referral rates indicate the positive impact of awareness and access initiatives."
Furthermore, the company undertook a progressive on-market share buyback, repurchasing $30 million in shares. This initiative, initiated in March, aims to gradually reduce the cash balance to approximately $200 million over a span of several years.
